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Crude stored at idled Come-by-Chance refinery to be removed by Lukoil

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The trading unit of Russia’s Lukoil plans to remove crude oil it has stored at the idled Come-by-Chance refinery in Newfoundland, Canada.

The Canadian refinery has been idled since last year. Lukoil’s Litasco unit is its primary crude supplier, and currently is storing between 2 and 3 million barrels of oil there that it plans on re-exporting to sell elsewhere.

Numerous North American refineries have had to shut as coronavirus restrictions sapped fuel demand. The refinery, operated by North Atlantic Refinery Limited (NARL) and New York-based investment firm Silverpeak, has been closed since March, and is actively searching for a new owner.

The crude supply deal NARL inked with Lukoil in 2016 is still in place for now, according to sources. Lukoil also has an agreement to finance the products for sale at its retail units.

Lukoil had been storing its crude oil for free at the refinery while the market was in contango, where later-dated prices are higher than current ones. Now, though, current prices are higher, giving Lukoil the opportunity to sell the oil soon, the sources said.

Some of the oil could be shipped out as early as February, the sources said, adding that other options were also in consideration.

Come-by-Chance has been looking for a new owner after Irving Oil backed away from a purchase and share agreement in October.

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